Food stamp programs costly for farmers markets

Food stamp programs at urban farmers’ markets are so complicated for the shopper and expensive for the farmer that fewer people are taking advantage of the federal program designed to help them.

University of Pennsylvania | Apr 03, 2012

Current food stamp programs at urban farmers’ markets attempting to bring fresh produce to economically stressed city dwellers are so complicated for the shopper and expensive for the farmer that fewer people are taking advantage of the federal program designed to help them, according to research at the University of Pennsylvania School of Nursing.

Record numbers of Americans are receiving Supplemental Nutrition Assistance Program (SNAP) benefits, as food stamps are now known, and many SNAP participants live in neighborhoods with little or no access to healthy food. A study conducted at the Clark Park Farmers’ Market in Philadelphia, Pa., found that making it easier for vendors to collect SNAP payments with electronic point-of-sale systems increased fresh produce sales to SNAP recipients by 38 percent.

Vendors find high cost

However, the costs associated with such systems may put them out of reach for farmers. The study, by Penn Nursing professor Alison M. Buttenheim, PhD, MBA, and colleagues, appears in the Journal of the Academy of Nutrition and Dietetics.

“Our study highlights the need for an equitable approach to subsidizing Electronic Benefits Transfer (EBT) fees at farmers’ markets,” Dr. Buttenheim reported. “Vendors told us, and we confirmed with a cost-benefit analysis, that they would not be able to break even on sales after paying the associated costs.”

SNAP participants access their benefits through EBT cards. To accept the cards at farmers’ markets, vendors must rent wireless POS terminals, pay for wireless service, and cover transaction fees. Because of the associated costs, many market managers operate a single wireless POS terminal for the entire market. SNAP beneficiaries may buy a token that they can exchange for produce, but they can’t receive change. Alternatively, customers can make their selections with a vendor, get a paper receipt for the total amount of the purchase, and present the receipt to the central terminal, where the customer’s EBT card is swiped for the exact amount of purchase. This must be repeated for each vendor the customer wants to visit.

Instead, Dr. Buttenheim and colleagues provided each vendor at the Clark Park Farmers’ Market with a wireless POS terminal for EBT and credit/debit card transactions. A grant covered all associated wireless charges, transaction fees, and processing fees during a pilot program which ran from June 2008 through February 2009. After the pilot period, the market returned to a single market-operated terminal and receipt system.

Researchers analyzed sales data at the market for four years, beginning 17 months before the pilot project and ending 22 months afterward. There was a 38 percent increase in SNAP/EBT sales during the months with multiple vendor-operated terminals. However, after the pilot project ended, sales to SNAP participants returned to pre-pilot levels, controlling for increases in SNAP participation in Philadelphia.

“Many stakeholders want to increase SNAP redemptions at farmers’ markets,” said Dr. Buttenheim. “We hope this study can inform policymakers about the specific mechanisms driving SNAP redemptions and about the need for subsidies for wireless POS technology at farmers’ markets.”

In an accompanying podcast, Dr. Buttenheim and co-author Allison Karpyn of The Food Trust, a Philadelphia nonprofit working with communities on lasting and stable sources of affordable food, discuss the impact of wireless POS terminals at farmers’ markets on sales to SNAP beneficiaries, and the policy implications of their research. The podcast is available at http://andjrnl.org/content/podcast.